Syndesis Lands Monster OSS Deal
The company isn't giving an exact value, but the deal is thought to be worth about $20 million. There is also an option to deliver further software components that could bump up the value by a further 15 percent, according to Syndesis.
That's a massive deal in an industry sector where many contracts are valued at less than $1 million. Last year's $10 million-plus contract award to inventory management specialist Cramer Systems Ltd. by BT Group plc (NYSE: BT; London: BTA) was thought to have been the largest OSS deal since the bubble years. (See BT Awards Monster OSS Deal.)
And if industry talk is to be believed, Syndesis has an even bigger deal in the pipeline, this time a $40 million contract with Verizon Communications Inc. (NYSE: VZ). Syndesis officials won't "confirm or deny" such a deal.
So why are these deals so big? Because they cover multiple services and networks. Telecom Italia, for instance, is already using Syndesis's software to provision and activate ATM, Frame Relay, DSL, and IP services across multiple networks, and is now standardizing on Syndesis for the fulfillment of Ethernet and MPLS services. The Italian operator is standardizing on a small number of vendors, including Micromuse Inc. (Nasdaq: MUSE), Tibco Software Inc. (Nasdaq: TIBX), and Telcordia Technologies Inc., as part of its NGOSS (new generation OSS) strategy (see Syndesis Struts at OSS Event).
Syndesis seems to have stolen a march on other OSS firms in developing provisioning software for new carriers services like Ethernet and VOIP (see Syndesis Launches Ethernet OSS and Syndesis Launches VOIP OSS).
Those capabilities have attracted other big operators as customers, including Belgacom (Euronext: BELG), BCE Inc. (NYSE/Toronto: BCE), MCI Inc. (Nasdaq: MCIP), Qwest Communications International Inc. (NYSE: Q), and SBC Communications Inc. (NYSE: SBC). (See Has Syndesis Scored Again With SBC? and Bell Canada Deploys Syndesis OSS.)
Syndesis also has an impressive list of partners, including Alcatel (NYSE: ALA; Paris: CGEP:PA), Cisco Systems Inc. (Nasdaq: CSCO), and Juniper Networks Inc. (Nasdaq: JNPR).
As a result, Syndesis is one of the few OSS mongers to have broken through the $100 million revenue barrier. So will this tempt the company to apply for a listing on Nasdaq, something it has long had in mind? In an email response to that question, Syndesis says: "We've finally reached $100 million in sales in a single year and, as a result, it's something we can start thinking about. But we're more interested, at this time, in turning Syndesis into a rapid growth company by expanding our product line and consolidating the industry."
Consolidating the industry? So is Syndesis planning an acquisition spree? Again, the company declines to confirm or deny any such plans.
Syndesis performed respectably in Heavy Reading's recent "2005 OSS Market Perception Study," ranking fifth in activation and sixth in provisioning, trailing only the sector's biggest names, such as Telcordia, Lucent Technologies Inc. (NYSE: LU), and MetaSolv Software Inc. (Nasdaq: MSLV). (See Report: OSS Minnows Have Muscle.)
— Ray Le Maistre, International News Editor, Light Reading